What makes a good dealer

The D9L, a machine weighing well over , pounds, is used primarily in mining and heavy construction. It was one of our first tractors to utilize a new design: an elevated sprocket that alters the shape of the track undercarriage from a traditional oval to a triangle. The new design achieves a variety of objectives: improved traction, reduced stress on the undercarriage and other fast-wearing parts, easier and faster repairs, and improved productivity.

We began shipping the D9L in Our timing was hardly great. The U. To make matters worse, Komatsu had recently entered the U. In mid, when we had several hundred machines operating throughout the world, a potential disaster struck. As the machines approached 2, hours of operation, they began to fail.

It turned out that a variety of parts—ranging from undercarriage components to water pumps to fan drives—were not as durable as we had thought. Our dealers quickly identified and reported the problems, and within weeks after the first machines had failed, we realized that we were facing a major crisis. Our dealers then helped us create and implement a comprehensive program for repairing machines, replacing the culprit parts in machines that had not yet failed, and assuring unhappy customers that we were on top of the problem.

For instance, several dealers, including Whayne Supply, based in Louisville, Kentucky, and Bowmaker now Finning in the United Kingdom, assigned some of their mechanics to serve on SWAT teams that repaired the machines quickly—often during the night.

Bowmaker dispatched teams of mechanics to assist Zahid, our dealer in Saudi Arabia. And Whayne quickly provided extraordinary service that prevented some important mining customers in Kentucky and southern Indiana from bolting to competitors.

By mid, just a year after we had first learned of the problems, virtually all the D9Ls had been repaired. The result: We minimized downtime, customer dissatisfaction evaporated, the D9L turned into a popular product, and the elevated-sprocket tractor gave us an overwhelming advantage. Even if Caterpillar is not the first to market with a product, our dealer network allows the company to be a fast follower.

For instance, our distribution system made it possible for us to become one of the leading players in backhoe loaders, a business we entered in the mid s. A backhoe loader is a small tractor with a hydraulic boom and excavation bucket mounted on the rear of the vehicle, and a loader bucket in front.

Like hydraulic excavators, the machines are versatile and used for many different kinds of work. They are especially popular with building-construction and utility contractors, who were not our traditional customers.

After a rocky start, we have established a strong sales position, surging past several entrenched competitors to capture the number two position in the worldwide industry. It was not just our product but also our dealers that made those gains possible.

Not only did they invest in inventories of replacement parts needed to support the new product, they also invested sizable sums in rental fleets when it became clear that many small contractors preferred to rent, rather than buy, the machines.

On the other hand, we are careful not to misuse our distribution system. Because we understand the competitive advantage provided by our dealers, the first questions we always ask when considering which new products to add are, How else can we leverage our distribution system around the world, and can our system add value?

If the answer to the latter is yes, then customers, dealers, and Caterpillar will all benefit. When considering which new products to add, we always ask how we can leverage our distribution system. Thirty or 40 years ago, manufacturers needed a mom-and-pop dealership in every town to compete.

That is no longer true. The farmers out there today are sophisticated businesspeople. And so we see a real growth opportunity in agricultural equipment. Highway-truck engines provide another case in point. Although we sell these engines directly to original-equipment manufacturers, our dealers invest time and money to influence truck owners to ask for Cat engines. That makes sense for all involved because parts-and-service support for our engines is conducted by or channeled through Caterpillar dealers.

Once again, our distribution system adds value and the end user benefits. We have good relationships with dealers not just because they like us but because the investment is good for them and for Caterpillar, and because both parties work to strengthen the relationship.

Both parties invest heavily in maintaining a relationship built on trust, confidence, and shared interests and rewards. We expect our dealers to be industry leaders, to provide the best customer support, and to demonstrate leadership in their communities. And they expect the highest-value products and services from us. I hear a lot of talk about trust between manufacturers and their suppliers and distributors, but few companies really put the talk into practice. The kind of trust that exists between Caterpillar and its dealers is something that could be built up only over generations.

Our dealership agreements are documents that run just a few pages. The final decision either to terminate or to appoint any dealer in the world rests with the CEO of this company; no one else at Caterpillar can make that decision. The foundation of our relationship is that both sides profit from their respective investments in the distribution system.

Our dealers are entrepreneurs who know how to make money. They also know very well that Caterpillar is much more than just a good account—we are a valuable long-term business associate. Our tight relationships are based on a handful of principles and practices. They include the following:. When times get tough, many companies turn on their dealers to prop up their own profits. Similarly, when a particularly lucrative opportunity presents itself, many companies will try to grab all the riches for themselves.

During the s, when the Alaskan pipeline was built, the pipeline consortium demanded that we sell directly to them or else they would buy from our competitors. We refused. In the end, the consortium did buy our equipment—from a joint venture between our Alaskan dealer and a Missouri dealer with a proven record of performance serving pipeline customers.

Even more telling are the sacrifices we made to keep our distribution organization financially viable during the s and during an industry slump in the early s. Japanese and European competitors aggressively targeted North America. We had work to do. Strategically, that was the right thing to do, but it was painful. We needed our dealers to defend our market leadership. We understood that if we let Komatsu or any other competitor erode our position in the United States, Europe, Asia, or anywhere else, it would cost us five times as much to get it back as it would to defend it.

That is the difference between taking a long-term view of business and taking a short-term view. Our approach was vindicated when the industry recovered. For example, every one of our five dealers in Mexico survived that terrible period. When the good times returned, we were the only ones with a viable dealer organization in Mexico, and we got the vast majority of the business and still have it.

Write down goals you want each employee to achieve and review them each day. The more often you review your goals, the more agile you are as a business. Counsel underachievers. Reward high achievers. Give your top employees the pat on the back they deserve — either with a simple compliment, a raise or a promotion. This will ensure they stick around. Track goal progression. Conduct one-on-one interviews with each employee to ask them the questions that pertain to their responsibilities and keep track of them in a spreadsheet.

Here are the tips that Rees has to share about employee discipline: How to discipline yourself. Follow through on all your promises to set an example for other employees. How to discipline your team. If they do something wrong, warn them not to do it again. If they do it again, warn them again.

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And in that rare occasion that you end up having a losing night at the tables, don't you walk away feeling much better about the evening if the table you were at provided some good conversation and laughter? The one person who can be a catalyst for an enjoyable casino experience is the dealer. The dealer is the straw that stirs the drink. There's much more to it than simply throwing the cards your way or spinning the roulette wheel.

With that in mind, we decided to ask a few veteran dealer instructors some of the key points they try to instill in their students. So, the next time you're at the casino and you find a dealer that has all 10 of the following attributes down pat, make yourself comfortable because you really have no reason to go anywhere for a while.

You're in for a fun night out — win or lose. Knowledge of the rules "Knowing and understanding the rules of the game you are dealing is obviously very important," says Henry Brown, the executive director of Casinos Wild, a Michigan-based school for dealers. You don't want dealers who are unsure of themselves. But at the same time you don't want to rush yourself or rush the players.

You've got to find the right balance. Mechanical skills "We try to teach the dealer to riffle the cards tight and smooth," Foster says.